The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Xavier I. Alexander.
DIGEST
SB 381 Original 2022 Regular Session Ward
Proposed law creates the "Louisiana Credit Access Loan Act".
Proposed law provides exceptions to applicability and provides definitions. Proposed law provides
for a consumer/borrower to gain access to a credit access loan from a lender/licensee. Proposed law
defines a "credit access loan" as any interest-bearing loan payable in substantially equal installments,
which does or includes the following:
(1)Offered by a licensee to a borrower.
(2)Includes a principal amount not exceeding $1,500.
(3)Includes a loan term of not less than 90 days and not more than 365 days.
Proposed law provides that the terms of a credit access loan agreement shall include or do the
following:
(1)Authorize the borrower to rescind the agreement within one business day at no cost.
(2)A disclosure notice to be written in at least 12-point, bold font stating that the borrower is
entitled to cancel the transaction at no cost by notifying the lender of his intent to cancel the
transaction by close of the business day immediately following the date the agreement is
signed and by returning to the lender all loan proceeds.
(3)A disclosure notice to be written in at least 16-point, bold font on the first page of each credit
access loan agreement stating that the borrower may request an extended payment plan if
unable to pay the loan in full when due and provides the process for requesting such.
Proposed law provides that the disclosure notices shall also be visibly posted at each licensee
location and on the homepage of the licensee's website.
Proposed law authorizes the licensee to contract for and receive the following from a borrower:
(1)A loan finance charge, calculated according to the actuarial method, not exceeding 36% per
year on the unpaid balances of the principal.
(2)A monthly maintenance fee not exceeding 13% of the principal amount originally contracted
under certain circumstances. (3)Delinquency charges.
(4)Non-sufficient funds (NSF) charges.
(5)An underwriting fee not exceeding $50 but only when the principal amount originally
contracted for is at least $400.
Proposed law provides that all fees and charges imposed, except delinquency and NSF charges, shall
be included in the calculation of the total amount of fees and charges and shall not exceed $1,500.
Prohibits any other charges not specifically authorized by proposed law.
Proposed law provides requirements for verifying a borrower's income.
Proposed law provides that certain acts are prohibited by a licensee including the execution of a
second device or agreement intended or designed to evade requirements, the inclusion of a hold
harmless clause and confession of judgment clause in an agreement, electronic draft of funds from
a borrower's account without specific consent, refusal of a partial loan payment of $50 or more, and
others. Proposed law provides the authority for enforcement with the office of financial institutions
(OFI).
Proposed law provides that a licensee may charge and collect from the borrower a late penalty of no
more than 10% of the delinquent amount but only when the terms of the penalty are clearly
disclosed, in writing, in the credit access loan agreement and the borrower has failed to pay the
delinquent amount within 10 days following the applicable due date.
Proposed law provides that the agreement may require that the borrower pay all costs awarded by
a court, in addition to reasonable attorney fees that shall not exceed 25% of the unpaid loan amount,
but only when the borrower has defaulted and the licensee has referred the matter to an attorney for
collection.
Proposed law requires OFI to promulgate rules necessary to implement and effectuate the purposes
of proposed law within 180 days of proposed law becoming effective.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 51:1501-1506)